The government of Iran ratified the new bylaw of foreign investment in the country's exchanges and OTC markets.
Under the new bylaw, foreign individuals and entities will be eligible to participate in the securities exchanges and "Over the Counter" markets trading, following a required license to be issued. The utmost trading limit will be advised in the license.
Efforts have been made to gradually eliminate the complications and constraints for foreign investors in the Iranian capital market. Based on the new bylaw, the Securities and Exchange Organization of Iran will be obliged to issue the trading license in seven working days after receiving the entire application documents. Each foreign individual or entity will be allowed to acquire up to 10 percent of a listed issuer's equities, as a non-strategic investor. Those applicants, who submit their request for more than this value, will be considered as strategic investors.
In the new bylaw, the non-strategic foreign investors will face no impediments for selling their acquired shares in the market, and will be treated with the existing market regulations. However, for strategic foreign investors, the repatriation period of capital will be two years from the buying date. These investors' request to sell their equities will be regarded under the articles of block trading regulations.
According to the article 7 of the bylaw, the total amount of foreign investment in the entire listed companies of an Exchange or OTC in Iran, or in any individual listed company shall not exceed 20 percent.
The licensed foreign investors will be allocated with a permission to open IR Rial or foreign currency accounts for their banking operations of importing and exporting their capital, capital gains and earnings, as well as exchanging their foreign currencies under the Central Bank of Iran's monetary rules and regulations (Central Bank of Iran).